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Oil supermajor Shell will put its Energy Transition Strategy to a non-binding shareholder vote at its annual general meeting next month, the first time an energy firm will be seeking an advisory approval of its plan to go to net zero.
Shell has pledged to become a net-zero energy company by 2050, and said earlier this year that its oil production peaked in 2019 and was set for a continual decline over the next three decades.
“As we transform our business, it is more important than ever for shareholders to understand and support our approach,” Shell’s chief executive officer Ben van Beurden said in the preface of the company’s Energy Transition Strategy.
“We are asking our shareholders to vote for an energy transition strategy that is designed to bring our energy products, our services, and our investments in line with the goal of the Paris Agreement and the global drive to combat climate change,” van Beurden added.
According to Shell’s strategy, the target for carbon intensity reduction is
6-8 percent by 2023 for the short term, 20 percent by 2030, and 45 percent by 2035, until reaching carbon intensity reduction of 100 percent by 2050.
“The vote is purely advisory and will not be binding. Shell’s Board and Executive Committee remain responsible and accountable for setting and approving Shell’s energy transition strategy,” Shell said in a statement today.
The supermajor will also seek every year, beginning in 2022, an advisory vote from shareholders on its progress in achieving its energy transition strategy.
The Church of England Pensions Board, a shareholder in Shell, will likely support the energy strategy, Adam Matthews, chief responsible investment officer, told The Wall Street Journal.
Shell is also set to tie the bonuses for its top executive directors more closely to the group’s performance in reaching its net-zero goals, if shareholders approve the plan at the annual general meeting in May. The weighting of the progress in the energy transition performance measures in the long-term incentive plans (LTIP) for executive directors is set to grow to 15 percent from 10 percent.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com